Why A Recession Is Now Likely In 2020 And What Investors Should Do About It

Why A Recession Is Now Likely In 2020 And What Investors Should Do About It

Posted On March 25, 2019 3:33 pm

It’s likely to be a rough year for the economy and stock market. But while a recession is now probable next year, that doesn’t mean investors can’t make smart moves to protect their wealth and profit from the bull market that will invariably follow the coming carnage.

I think we can all agree that recessions and bear markets are no fun. With the bull market now the longest in US history and the US economic expansion set to become the longest in history in July 2019, many investors have been fearful that a recession and bear market are “overdue”.

While neither a bull market or expansion die of old age (according to a study by the San Fransisco Federal Reserve), the economic fundamentals have now deteriorated to the point that a recession does indeed look likely (75% to 90% probability) within the next nine to 16 months.

This means that a bear market is also more likely than not to begin relatively soon. And given that the Great Recession saw the S&P 500 decline by 57% (the Dow Jones Industrial AverageAnd Nasdaq did as bad or worse) it’s understandable that investors might be very afraid that we’re set for another epic crash.

But now isn’t the time to panic, but rather look at the facts, including what’s likely to happen to both the economy and stock market over the coming 12 to 18 months. More importantly, discover what you can do with your portfolio to not just protect your hard earned wealth, but potentially profit from the coming bull market, which will follow the bear as surely as day follows night.

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Photo: “Wise Investing” by cafecredit is licensed under CC BY

About author

Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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